Best Practice: Spotting the H4R in EURGBP
Tweet on 27 Mar 2014
$eurgbp HS + Bearish expansion pic.twitter.com/YMX7Rj4Ejf
— TerraSeeds FX Tflow® (@terraseeds) March 27, 2014
$eurcad $eurgbp bearish expansion pending friday movement (H4R). $cadchf BM 2 boxes. $usdcad WRMB
— TerraSeeds FX Tflow® (@terraseeds) March 27, 2014
Conditions of a H4R
- Strong resistance that is obvious (Reversal towards Bearishness)
- Possible reversal Chart pattern seen near resistance
- H4 Expansion in the opposite way from trend (In this case, a Bearish H4 expansion is seen)
- Price has since closed below several H4 boxes high.
- Any retracement back to these highs could see them as resistance.
Next Support levels on Big Picture
Using the charts on the higher timeframe, we can predict the next possible support levels.
Update by Jerome 1st Apr 2014: EWUS pointed out by Daniel (@dk87888)
Criteria for EWUS
- D1 and above time frame
- Price must retrace up to a min of Fib6 of the smaller flow.
At the moment, price has already turned up at the Fib6 support. Based on the H4R strategy mentioned in this post, if price were to continue to come down and break beyond the Fib6 support, there is a chance it could retest the lower level of the support zone.
Update (2nd Apr 2014 by Jerome)
- H4 shows possible 1234 pattern which matches criteria of 1234 seen with boxes
- Point 2 at box high
- Point 2 & Point 4 at different boxes
- Point 4 at strong resistance made of confluence of:
- Previous Boxes High/Low
- Fib-R of flow levels
- Turning points on higher timeframe
Currently the possible point 4 matches up with a F3 level of the downflow, there is no condition that a deeper retracement of a Fib level (F6,F7,F8) will result in a better trade then one that is shallow (F2,F3) or vice versa.
When the current strength of price in a certain direction is strong then its retracement might be shallow.
Price ultimately needs to close below the lowest of the H1 boxes low and subsequently below F6 (Fib-R from pt1 to pt4) for it to be able to head lower.
Update 16 April 2014 by Jerome
Addressing question by student on if trading the WRMB found two weeks back was correct and how to have managed it.
- Following the bearish expansion, price retraced to form a 1234 pattern.
- After crossing point 1, price did a WRMB of previous 2 H4 boxes low.
- The TP area for this WRMB should have been the high of the range. However as the high of the range is not equal, using the lower value for trade management would have been prudent.
- Based on the previous H4 boxes, there is still not sign of price turning up yet as there has been no higher highs formed by the H4 boxes.
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Thanks 师兄. 1 question though: do you think there is EWUS setup?
Jerome, thanks for explanation.